Singh’s cooperation was pivotal, with prosecutors pushing for leniency due to his assistance in exposing one of the largest financial frauds in US history, which led to Bankman-Fried’s conviction and significant asset recovery for victims.
By Bena Ilyas
Edited by Julia Sakovich
Updated
3 mins read
Nishad Singh, the former FTX chief engineer, is set to be sentenced on Wednesday for his role in the $8 billion cryptocurrency fraud led by Sam Bankman-Fried, according to Reuters. Singh was involved in the exchange’s failure, causing significant financial losses for numerous investors.
Singh pleaded guilty to six felony counts, including fraud and conspiracy, and has been cooperating with prosecutors throughout the legal proceedings. His testimony was crucial in the trial that ultimately led to Bankman-Fried’s conviction on multiple fraud charges.
As part of his plea deal, Singh admitted to being a key player in what authorities describe as one of the largest financial frauds in US history. Additionally, he confessed to acting as a “straw donor” for Bankman-Fried’s significant political contributions.
Currently, Bankman-Fried is incarcerated at the Metropolitan Detention Center in Brooklyn, serving a 25-year sentence following FTX’s November 2022 collapse. The exchange, once valued in the billions, failed due to massive customer withdrawals and poor financial management.
Judge Lewis Kaplan will deliver Singh’s sentence at 3 p.m. ET on Wednesday in Manhattan federal court. Singh is expected to receive a lighter sentence than Bankman-Fried. Prosecutors have pushed for leniency, citing Singh’s crucial help in the investigation and asset recovery process. Singh’s defense has argued for no prison time, stressing his cooperation as a key factor in reducing penalties.
The U.S. Attorney’s Office in Manhattan highlighted Singh’s role, stating his “substantial assistance” aided in prosecuting offenders and recovering assets for victims. This cooperation appears central to the push for a reduced sentence.
In September, Judge Kaplan sentenced Caroline Ellison, Bankman-Fried’s former girlfriend and Alameda Research executive, to two years in prison. Her cooperation also influenced her sentence, though Kaplan stressed it did not erase the seriousness of her offenses.
Singh’s legal issues trace back to his role at FTX, where he served as chief engineer. His attorneys argue Singh only became entangled in the fraud later, after Bankman-Fried and Ellison had already chosen to redirect billions in customer funds to offset Alameda’s losses. Timing plays a pivotal role in evaluating his responsibility and level of involvement.
Bankman-Fried’s ascent and downfall unfolded swiftly. During the COVID-19 era, he seized on the cryptocurrency surge, reaching a net worth of $26 billion by October 2021, as noted by Forbes. His influence expanded further through significant donations to charities and Democratic politicians. Yet, a sharp plunge in cryptocurrency values followed by FTX’s collapse erased his fortune almost instantly.
Singh’s testimony spotlighted a key moment in September 2022 when he challenged Bankman-Fried over a major gap in customer funds. The conversation occurred on the balcony of their $35 million penthouse in the Bahamas. Singh recalled Bankman-Fried’s pledge to secure additional capital and cut expenses to counter FTX’s financial crisis.
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With over 3 years of crypto writing experience, Bena strives to make crypto, blockchain, Web3, and fintech accessible to all. Beyond cryptocurrencies, Bena also enjoys reading books in her spare time.
